Every Apple phone sold = Money for Apple
Every Android phone != Money for Google
That's not to say that Apple shouldn't be worried, but unlike in the Mac vs. PC situation, their competition isn't a single company making profit off every unit sold. It's a mass of semi-co-operative, semi-competitive groups; many of which are helping themselves to the free Android software without giving anything back to the people who made it.
That's a big difference.
People who believe Android is 'free' do not understand what's in it for Google. If this was not the case, then lawsuits like Skyhook wouldn't exist: http://www.theverge.com/2011/05/12/google-android-skyhook-la...
Combine all of that with the lack of online usage and engagement amongst Android users and everything isn't quite so rosy.
Shipping Google's applications (GMail, Maps, Google's store; maybe others) requires a license from Google. That probably is not free as in beer, either, but I find it hard to find definitive statements for that on the web. developer.android.com seems to only target software developers.
Also, some technologies used in Android are patented, and require payments to patent holders.
So, in practice, Android is not free for smartphone makers.